Health Care Watch: May 5, 2025
The following Federal Health Policy (FHP) Strategies Weekly Health Care Watch provides a summary of legislative and regulatory health care activities from April 27 – May 3. Where available, hyperlinks are included to the relevant documents. Please let us know if you have any questions or would like additional information on the items below.
LEGISLATIVE UPDATE
House
On April 28, Energy & Commerce Committee Republicans met to discuss the Committee’s $880 billion budget reconciliation savings target. The meeting was led by Committee Chairman Brett Guthrie (R-KY) who stated that he still wants to mark up his panel’s portion of the bill in the coming weeks despite unresolved Medicaid disagreements with GOP conference members such as Rep. Don Bacon (R-NE) who stated that he would oppose any Medicaid cuts in excess of $500 billion. The Committee is considering various polices to meet its $880 billion savings target including PBM reforms (eliminating spread pricing in Medicaid, reporting), Medicaid work requirements and, for the expansion population, per capita caps and Federal Medical Assistance Percentage (FMAP) reductions. Further complicating matters, the White House is pushing back against Medicaid cuts and instead suggesting savings by adopting Most Favored Nation pricing schemes for drugs in Medicaid. House Speaker Mike Johnson (R-LA) expressed concerns about such a proposal. The Committee was planning to markup on May 7 and has since postponed that date until at least the week of May 12.
In addition to the tax cuts in its reconciliation package, the Ways & Means Committee may consider a two-year Medicare physician payment increase, paid for with Medicare cuts, including possible market basket cuts to providers.
On April 28, Ways & Means Committee Chairman Jason Smith (R-MO) and Committee Republicans sent a letter to Centers for Medicare & Medicaid Services (CMS) Administrator Dr. Mehmet Oz and Center for Medicare & Medicaid Innovation (CMMI) Director Abe Sutton outlining Committee Republican priorities for CMMI. Priorities include focusing on payment models that save money, improving transparency and communication in changes to existing models, ensuring solicitation of stakeholder feedback in the development of new models and renewed attention on improving rural health care. The letter also notes concerns with CMMI, highlighting the “Center’s history of developing costly models that either fail to meet or are not on track to meet that standard which is rooted in statute.”
On May 5, the House will consider H.R. 1503, the Stop Forced Organ Harvesting Act of 2025.
Senate
On April 29, Health, Education, Labor & Pensions (HELP) Committee Ranking Member Sen. Bernie Sanders (I-VT) and Reps. Pramila Jayapal (D-WA) and Debbie Dingell (D-MI) introduced the Medicare for All Act. Under this legislation, Medicare would provide comprehensive health care to every American with no premiums, co-payments, or deductibles and would expand Medicare to include dental, hearing, and vision care.
On April 30, Appropriations Committee Chair Susan Collins (R-ME) demanded that Trump Administration cuts to NIH research be reversed. At a committee hearing on biomedical research and innovation, Chair Collins stated that “proposed funding cuts and policy uncertainties threaten to destabilize our system and to cause the United States to lose its global leadership.”
On May 1, Finance Committee Ranking Member Ron Wyden (D-OR), Senator Ed Markey (D-MA), and Senator Angus King (I-ME), along with 16 other Democratic senators, introduced a resolution that calls on the Trump Administration to withdraw a change in policy that would significantly reduce public notice and comment, and limit public engagement on new regulations at the Department of Health & Human Services (HHS). The House introduced a companion resolution, led by Reps. Lizzie Fletcher (D-TX) Gabe Amo (D-RI) and Mike Quigley (D-IL).
REGULATORY UPDATE
On April 25, Chris Klomp officially began his role as Deputy Administrator and Director of the Center for Medicare at CMS.
On April 28, CMS staff received an email detailing the closure of CMS’ Office of Equal Opportunity and Civil Rights. The email stated that the office is set to close in June and complaints nearing completion related to workplace harassment and discrimination will be closed out in the coming weeks and remaining complaints will be “transferred to an appropriate entity.”
On April 29, CMS Administrator Oz discussed his vision for CMS at the U.S. Chamber of Commerce Summit, advocating for the use of preventative care to reduce chronic disease and healthcare spending. He also discussed bridging the gap between HHS and the Department of Agriculture as well as HHS Secretary Robert F. Kennedy Jr.’s plan to research the cause of autism.
On April 29, FDA Commissioner Marty Makary said in an interview that he rejected an internal proposal to reorganize the FDA review centers that oversee drugs, biologics and medical devices. The FDA was considering reorganizing the agency into five shared services offices. Makary stated: “[a] proposal for a reorganization came from some staff, but I rejected that proposal.”
On April 30, CMS held a Town Hall meeting to discuss the Medicare Drug Price Negotiation Program. The meeting featured speakers on each drug selected for the second cycle of negotiations. Speakers included patients, consumer and patient organizations, clinicians and researchers.
On April 30, HHS spokesperson Andrew Nixon stated that HHS Secretary Kennedy is changing the way vaccines are tested, requiring all new vaccines to be tested against a placebo before being licensed. He also stated that HHS is building new surveillance systems to measure vaccine risks and benefits.
On May 1, HHS and NIH announced the development of the next-generation, universal vaccine platform, Generation Gold Standard, using a beta-propiolactone (BPL)-inactivated, whole-virus platform. This initiative will fund the NIH’s in-house development of universal influenza and coronavirus vaccines, including candidates BPL-1357 and BPL-24910. These vaccines aim to provide broad-spectrum protection against multiple strains of pandemic-prone viruses like H5N1 avian influenza and coronaviruses including SARS-CoV-2, SARS-CoV-1, and MERS-CoV. Clinical trials for universal influenza vaccines are scheduled to begin in 2026, with FDA approval targeted for 2029. The intranasal BPL-1357 flu vaccine, currently in advanced trials, is also on track for FDA review by 2029.
On May 1, HHS, through the Office of the Assistant Secretary for Health and Office of Population Affairs, released a comprehensive review of evidence and best practices for promoting the health of children and adolescents with gender dysphoria. HHS states that the review reveals concerns about medical interventions, such as puberty blockers, cross-sex hormones, and surgeries.
On May 1, news reports indicated that HHS hired a Yale University undergraduate student, Peter Bowman-Davis, to serve as the Agency’s Acting Chief AI Officer. Bowman-Davis was previously a fellow at the venture capital firm Andreessen Horowitz.
WHITE HOUSE
On April 29, President Trump released an Executive Order (EO) entitled Addressing Certain Tariffs on Imported Articles. The EO sets out the procedure for determining which of multiple tariffs shall apply to an article when that article is subject to more than one action.
On May 2, the White House released an FY 2026 abbreviated budget request that includes only discretionary items and sets forth the administration’s policy priorities. The budget requests a 22% cut to domestic spending overall, including large cuts to HHS. Specifically, the budget provides $93.8 billion for HHS, a 26.2% decrease from the FY 2025 level of $127 billion. This includes the following cuts: $674 million from CMS, $3.59 billion from the CDC, and $17.97 billion from NIH. The budget also provides for $500 million to support the Making American Healthy Again (MAHA) Commission. Additional budget documents can be found here.
A list of all administrative and health care-related EOs can be found here. FHP Strategies will update this document, as needed.
HEARINGS
Senate
Finance Committee
May 6; 10:00 AM; 215 Dirksen
Nomination hearing to consider James O'Neill to be Deputy Secretary of the Department of Health and Human Services (HHS) and Gary Andres to be an Assistant Secretary of HHS
Witnesses: James O'Neill, Gary Andres
HELP Committee
May 8; 10:00 AM; 430 Dirksen
Nominations of James O’Neill to serve as Deputy Secretary of HHS, and Janette Nesheiwat to serve as Medical Director in the Regular Corps of the Public Health Service and Surgeon General of the Public Health Service
Witnesses: James O’Neill, Janette Nesheiwat
HHS Secretary RFK Jr. to testify before the committee
TBD; May 14
House
Oversight and Government Reform Committee
May 7; 10:00 AM; 2247 Rayburn
Examining the Growth of the Welfare Stat: Part II
Appropriations Committee
Subcommittee on Labor, Health & Human Services, and Education
HHS Secretary RFK Jr. to testify before the committee
TBD May 14
Energy & Commerce Committee
Markup of policies related to budget resolution
TBD; Mid-May
Ways & Means Committee
Markup of policies related to budget resolution
TBD; Mid-May
RULES AT THE WHITE HOUSE OFFICE OF MANAGEMENT & BUDGET (OMB)
Pending Review
CMS
Preserving Medicaid Funding for Vulnerable Populations – Closing a Health Care-Related Tax Loophole (CMS-2448); Proposed Rule; 4/19/25
CY 2026 Hospital Outpatient PPS Policy Changes and Payment Rates and Ambulatory Surgical Center Payment System Policy Changes and Payment Rates (CMS-1834); Proposed Rule; 4/21/25
CY 2026 Changes to the End-Stage Renal Disease (ESRD) Prospective Payment System and Quality Incentive Program (CMS-1830); Proposed Rule; 4/24/25
CY 2026 Home Health Prospective Payment System Rate and Durable Medical Equipment, Prosthetics, Orthotics, and Supplies Competitive Bidding Program Updates (CMS-1828); Proposed Rule; 4/25/25
CY 2026 Revisions to Payment Policies Under the Physician Fee Schedule and Other Revisions to Medicare Part B (CMS-1832); Proposed Rule; 4/25/25
REPORTS
Government Accountability Office (GAO)
On April 28, GAO released a report examining the initial implementation of Medicare drug pricing provisions. GAO found that CMS’ plans for monitoring appropriated funds for the negotiation and inflation rebate programs are consistent with relevant federal internal control principles. GAO stated that as of December 2024, CMS planned to obligate approximately $2.9 billion of the $3 billion in negotiation program appropriated funds from fiscal years 2022 through 2033. CMS plans to use the majority (~85%) of actual and planned obligations for program support—including contractors to support access to negotiated prices by pharmacies and other dispensing entities—and administration. Additionally, GAO found that CMS plans to obligate approximately $155 million of the $160 million in inflation rebate program appropriated funds from 2022 through 2031. CMS plans to use the majority (~82%) of actual and planned obligations for rebate operations, administration, and program support. GAO made no recommendations.
ADDITIONAL POLICY NEWS
On April 29, Judge Dabney Friedrich of the U.S. District Court for the District of Columbia heard several motions for summary judgment from Kalderos, Eli Lilly, Bristol Myers Squibb, Sanofi and Novartis regarding HHS’ decision to prevent implementation of a 340B rebate model that would allow the companies to charge more upfront for their products and refund the difference after verifying a patient’s eligibility.
On April 29, the Supreme Court sided with HHS in a case regarding Medicare Disproportionate Share Hospital payments. Justices ruled 7-2 that Medicare used the appropriate method for calculating the safety-net payments. Justice Elena Kagan joined the court's conservative judges in the final ruling.